EN BANC
[G.R. No. 260403. July 19, 2022.][Formerly UDK 17332]
PHILIPPINE CHARITY SWEEPSTAKES OFFICE, JOSEFINA A. SARSONAS, MARIA LOURDES S. SOLIMAN, CAROLINE Y. ZABLAN, CARMELITA B. VELASCO, CARMELA D. PALER, PIERRE Z. FERRER, JOSE CARLO V. DE JESUS, LIZA N. MARFORI, RODOLFO G. DE GUZMAN, JORGE L. JORVINA, MARICEL C. HERRERA, GILBERT S. GOMEZ, REGIDOR G. SANTOS, RAFAEL R. TINOSO, AND MARSHA L. DANCEL, petitioners,vs.COMMISSION ON AUDIT, respondent.
NOTICE
Sirs/Mesdames :
Please take notice that the Court en banc issued a Resolution dated JULY 19, 2022, which reads as follows:
"G.R. No. 260403 [Formerly UDK 17332] (Philippine Charity Sweepstakes Office, Josefina A. Sarsonas, Maria Lourdes S. Soliman, Caroline Y. Zablan, Carmelita B. Velasco, Carmela D. Paler, Pierre Z. Ferrer, Jose Carlo V. De Jesus, Liza N. Marfori, Rodolfo G. De Guzman, Jorge L. Jorvina, Maricel C. Herrera, Gilbert S. Gomez, Regidor G. Santos, Rafael R. Tinoso, and Marsha L. Dancel, Petitionersv. Commission on Audit, Respondent). — Before the Court is a Petition for Certiorari1 under Rule 64, in relation to Rule 65 of the Rules of Court, filed by the Philippine Charity Sweepstakes Office (PCSO), Josefina A. Sarsonas (Sarsonas), Maria Lourdes S. Soliman (Soliman), Caroline Y. Zablan (Zablan), Carmelita B. Velasco (Velasco), Carmela D. Paler (Paler), Pierre Z. Ferrer, Jose Carlo V. De Jesus, Liza N. Marfori, Rodolfo G. De Guzman, Jorge L. Jorvina, Maricel C. Herrera, Gilbert S. Gomez, Regidor G. Santos, Rafael R. Tinoso, and Marsha L. Dancel (petitioners) assailing the Commission on Audit (COA) Commission Proper (COA Proper) Decision 2 dated July 29, 2016 and Resolution 3 dated January 31, 2020. The assailed issuances affirmed the disallowance of cost of living allowance (COLA) payments to the officials and employees of PCSO-Tarlac Provincial District Office (TPDO).
The Antecedents
The present case stemmed from Notice of Disallowance No. (ND) 11-001-OF-(10) 4 dated April 8, 2011, relative to the COLA payments to PCSO-TPDO officials and employees in the aggregate amount of P336,000.00. The COA explained that the COLA is deemed already integrated in the standardized salary rates of PCSO employees. Thus, the subject payments violated the general integration rule under Section 12 5 of Republic Act No. (RA) 6758, 6 or commonly referred as the 'Salary Standardization Law' (SSL), and the provisions of Department of Budget and Management (DBM) Circular No. 2001-03 dated November 12, 2001. 7
The following petitioners were named as persons liable for the disallowance, viz.: (a) Zablan, Accountant, for having certified that the supporting documents are complete and that the expenses are proper and for having received the COLA; (b) Sarsonas, Department Manager, for having approved the payment; (c) Velasco, Internal Auditor, for having allowed the transaction prior to payment and for having received the payment; and (d) Soliman, Paler, and other PCSO-TPDO employees for having received the payment. 8
Aggrieved, petitioners appealed 9 the case to the COA Director and argued that: (1) RA 1169, 10 otherwise known as the PCSO Charter, specifically authorized the PCSO Board of Directors to fix the salaries of its officials and employees; 11 (2) the COLA had become part of the compensation package of PCSO employees; 12 and (3) the grant of COLA for the calendar year (CY) 2010 was authorized by the Office of the President through a Letter 13 dated May 19, 2011, signed by then Executive Secretary Paquito N. Ochoa, Jr. (Executive Secretary Ochoa). 14
Ruling of the COA Director
In COA RO3 Decision No. 2012-34 15 dated August 14, 2012, the Director of the COA Regional Office No. III denied the appeal and ruled as follows: first, the subject COLA payments could not be justified just because the PCSO Board of Directors had authorized the grant thereof pursuant to the PCSO Charter. The SSL provides the general rule that all allowances, unless otherwise excepted, are already consolidated in the compensation. Only the DBM is authorized to determine allowances that are excepted from the general integration rule. 16Second, administrative or executive acts, orders, and regulations shall be valid only when they are not contrary to the laws or the Constitution. 17 Consequently, inasmuch as the approval and grant of COLA embodied in the Letter dated May 19, 2011 was contrary to law, it was not legally binding. 18
Undaunted, petitioners elevated the case to the COA Proper. 19
Ruling of the COA Proper
In the assailed Decision, 20 the COA Proper affirmed the COA Director's ruling. It held that the PCSO Board of Director's authority under Section 9 (B) of the PCSO Charter (i.e., power to fix the salaries and determine the reasonable allowances, bonuses, and other incentives in favor of PCSO employees) is not ipso facto tantamount to an absolute, unbridled financial independence to grant any kind of allowance in defiance of existing laws and regulations. The PCSO remains duty-bound to abide by the laws relating to the disbursement of public funds. Following the general integration rule under Section 12 of the SSL and Sections 5.4 and 5.5 of DBM Corporate Compensation Circular (CCC) No. 10-99, 21 COLA is not allowed to be paid separately from the basic salary. 22 The contention that the COLA had become part of the PCSO compensation package has no merit. As the COLA was granted and paid in violation of the SSL and DBM CCC No. 10-99, the payees of the subject COLA did not acquire any vested right in relation thereto. 23 The Letter dated May 19, 2011 cannot be given probative value because: (a) mere photocopies were submitted and their genuineness and due execution cannot be ascertained; 24 (b) the letter refers to another correspondence (i.e., letter-request 25 of former PCSO Chair Margarita P. Juico) but the latter was not submitted to the COA Proper; 26 and (c) it cannot be ascertained whether the COLA was one of the benefits that were submitted for the Office of the President's approval and whether the scope of the subject approval in fact included the COLA. 27
In denying the subsequent motion for reconsideration 28 in its assailed Resolution, 29 the COA Proper further cited PCSO v. Chairperson Pulido-Tan30(2016 PCSO Case), which also involved benefits and incentives given a post facto approval by Executive Secretary Ochoa. 31 In the said case, the Court confirmed that the PCSO Board of Directors has no unbridled authority to fix and grant allowances to PCSO employees, as Section 9 of the PCSO Charter expressly states that the power to fix employee compensation is 'subject to pertinent civil service and compensation laws.' 32
Finally, the COA Proper discussed the liability over the disallowance: (a) pursuant to Section 43, Chapter 5, Book VI of the Administrative Code of 1987, the approving/certifying officers are solidarily liable over the disallowance; (b) pursuant to the principle of unjust enrichment, the payees are obligated to refund the amounts they have received; and (c) while the Court in the 2016 PCSO Case held the members of the PCSO Board of Directors liable, particularly for having passed a resolution that granted incentives contrary to prevailing laws and regulations, the Board of Directors members were not impleaded in the present disallowance proceedings; thus, the auditor was directed to determine whether they may also be held solidarily liable. 33
Hence, the present petition. 34
Petitioner' Arguments
Petitioners cite the following grounds in support of the present petition:
6.1 The submitted copies of the Letters are public records, which were certified as true copies by PCSO's officer in the custody of the same thus, admissible in evidence.
6.2 Petitioners['] reliance on the post facto approval of the President of the Philippines demonstrates their good faith. Thus, they should not be held liable for the refund of the disallowed amount of PhP336,000.00. 35
In brief, petitioners allege that the COA Proper committed grave abuse of discretion amounting to lack or excess of jurisdiction when it failed to give weight to the post facto approval borne by Executive Secretary Ochoa's Letter dated May 19, 2011 and when it failed to recognize the payees' good faith in receiving the disallowed amounts. 36
Respondent's Arguments
Respondent, represented by the Office of the Solicitor General, maintains that the COA Proper correctly disregarded the Letter dated May 19, 2011 for several reasons. First, petitioners failed to submit the original or a certified copy of the Letter dated May 19, 2011. 37 Second, the 2020 case of PCSO v. COA38 (2020 PCSO Case) involved the very same Letter dated May 19, 2011, wherein the Court ruled that the approval embodied in the correspondence did not refer to the same benefits subject of the disallowance case. 39 Third, the Court made the following pronouncements in the 2020 PCSO Case: (a) the approving/certifying officers cannot be considered in good faith; and (b) good faith is no longer a defense available to the recipients of undue payments. 40
The Issue
Did the COA Proper commit grave abuse of discretion in upholding the disallowance of the COLA payments and finding herein petitioners liable therefor?
Our Ruling
Petitioners failed to comply with the mandatory procedural requirements in relation to Rule 64 petitions. Furthermore, the arguments raised in the present petition are not bona fide imputations of grave abuse of discretion against the COA Proper. Hence, the present petition must be dismissed outright.
Still, the petition is still unmeritorious in view of the Court's recent pronouncements in similar disallowance cases involving petitioner PCSO.
Formal Requirements in the
At the onset, the Court observes that: (1) the appended postal money order intended to cover the payment of docket fees had become stale; 41 (2) petitioners failed to file the required number of copies of the petition; and (3) the attestations on verification submitted by petitioners are incomplete. 42
In the Resolution 43 dated March 8, 2022, the Court directed petitioners to comply with the relevant procedural requirements to correct the above-noted deficiencies. On March 29, 2022, solely in relation to the matter of the stale postal money order, petitioners requested the Court to allow them until April 1, 2022 to rectify the deficiency. 44 The Court granted this request on April 19, 2022. 45 And on June 21, 2022, the Court noted petitioners' compliance with these directives.
Parenthetically, the Rules of Court regard a petitioner's failure to pay the docket and other lawful fees upon filing of the petition46 and to file the petition in 18 legible copies47 as a sufficient ground for the petition's dismissal.
Verily, noncompliance will not always result in the case's outright dismissal. It is fortunate that petitioners ably corrected their deficiencies within the extended time. In the Court's view, had petitioners failed to comply with these requirements, despite a formal reminder/directive for compliance and an extended period of time to do so, such failure would have been inexcusable and fatal.
Bona Fide Imputation of Grave
The Court's review of COA decisions via Rule 64 petitions is limited to jurisdictional errors or grave abuse of discretion.48 In general, the Court shall dismiss the petition outright and uphold the COA's ruling, 49 unless the petitioner establishes a prima facie case of grave abuse of discretion in one's petition. The petitioner bears the burden of specifically identifying and proving not merely reversible error committed by the COA Proper but such a capricious and whimsical exercise of judgment as is equivalent to lack of jurisdiction. 50
To recall, petitioners' accusations of grave abuse of discretion on the part of the COA Proper are based on the latter's failure to admit and give credence to the Letter dated May 19, 2011 and appreciate petitioners' defense of good faith as an excuse from the payment or refund of the disallowed amount. 51
It is clear that the arguments are not bona fide imputations of grave abuse of discretion. At best, they point out mere errors of judgment on the part of the COA Proper inasmuch as petitioner only puts in issue the tribunal's manner of appreciation of evidence and consideration of legal defenses. The matters are beyond the scope of certiorari proceedings, and thus, cannot be reviewed by the Court via a Rule 64 petition. 52
Previous Disallowance Cases
Even if the Court ignores the above-discussed deficiencies, the present petition still fails. Thematters herein involved have been settled already in recent jurisprudence.
The 2016 and 2020 PCSO Cases involved the disallowance of various PCSO-paid benefits and incentives, including the COLA. In upholding the disallowance on both occasions, the Court decreed as follows:
First, following Intia, Jr. v. COA53 and Phil. Retirement Authority (PRA) v. Buñag, 54 the Board of Directors of PCSO, a GOCC, has no absolute authority in fixing employee compensation. Its power must be exercised in accordance with prevailing laws and regulations, such as the SSL. 55
Second, the COLA, not being exempted by Section 12 of the SSL, is deemed integrated with the standardized salaries of PCSO officials and employees. It cannot be paid on top of their basic salaries. Furthermore, it was not shown that the COLA given to PCSO employees were given pursuant to the unique nature of their office and work performed. The COLA is actually not an allowance per se but a benefit in the nature of financial assistance or bonus paid for the purpose of alleviating the economic condition of the subject PCSO officials. 56
Third, a post facto approval given by the Executive branch is of little weight. As explained in the 2016 PCSO Case:
[W]here there is an express provision of the law prohibiting the grant of certain benefits, the law must be enforced even if it prejudices certain parties on account of an error committed by public officials in granting the benefit. An executive act shall be valid only when it is not contrary to the laws or the Constitution. 57 (Citations omitted.)
Fourth, the Letter dated May 19, 2011 58 could not be regarded as an approval of the COLA payments specifically. The correspondence referred to PCSO allowances and benefits granted and paid prior to September 8, 2010. Without an express enumeration of the allowances and benefits being approved, it is uncertain whether the CY 2010 COLA payments subject of the present controversy were within the scope of the alleged approval.
Fifth, pursuant to the landmark case of Madera v. Commission on Audit, 59 the 2020 PCSO Case emphasized:
[T]he approving andcertifying officers, the recipients of the benefits, both officials and employees alike, who had no participation in the approval and release of the disallowed benefits, even if they have acted in good faith due to their honest belief that the grant of the said allowances and benefits had legal basis, are now liable to refund the disallowed amounts. 60 (Italics supplied.)
Liability of the Members of the
To clarify, consistent with the findings in the 2016 and 2020 PCSO Cases, the PCSO Board of Directors members are solidarily liable for the disallowed amount on account of their participation as the approving officers who passed the resolutions granting illegal benefits (i.e., the COLA). However, as pointed out by the COA Proper in the assailed Resolution, the PCSO Board of Directors members were not impleaded in the present disallowance proceedings. 61 Consequently, their liability cannot be enforced without and prior to the filing of the appropriate action against these concerned officials. 62
WHEREFORE, the petition is DISMISSED. The Decision dated July 29, 2016 and the Resolution dated January 31, 2020 of the Commission on Audit Commission Proper are AFFIRMED." (52)
By authority of the Court:
(SGD.) MARIFE M. LOMIBAO-CUEVASClerk of Court
Footnotes
1.Rollo, pp. 3-18.
2.Id. at 19-24; approved by COA Chairperson Michael G. Aguinaldo and Commissioners Jose A. Fabia and Isabel D. Agito.
3.Id. at 25-32; approved by COA Chairperson Michael G. Aguinaldo and Commissioner Roland C. Pondoc.
4.Id. at 36-38; signed by Audit Team Leader Grace P. Tan and Supervising Auditor Lualhati C. Abesamis.
5. Section 12 of Republic Act No. 6758 provides:
SECTION 12. Consolidation of Allowances and Compensation. — All allowances, except for representation and transportation allowances; clothing and laundry allowances; subsistence allowance of marine officers and crew on board government vessels and hospital personnel; hazard pay; allowances of foreign service personnel stationed abroad; and such other additional compensation not otherwise specified herein as may be determined by the DBM, shall be deemed included in the standardized salary rates herein prescribed. x x x
xxx xxx xxx
6. Entitled, 'An Act Prescribing a Revised Compensation and Position Classification System in the Government and for Other Purposes,' approved on August 21, 1989.
7.Rollo, p. 36.
8.Id.
9. See Memorandum of Appeal; id. at 39-46.
10. Entitled, 'An Act Providing for Charity Sweepstakes Horse Races and Lotteries,' approved on June 18, 1954.
11.Rollo, p. 42.
12.Id. at 42-43.
13.Id. at 76.
14.Id. at 44.
15.Id. at 51-54; signed by Regional Director Winnie Rose H. Encallado.
16.Id. at 52.
17.Id. at 53, citing Eastern Shipping Lines v. Court of Appeals, 353 Phil. 676 (1998).
18.Id.
19. See Petition for Review; id. at 55-64.
20.Id. at 19-24.
21. With the subject, 'Rules and Regulations for the Implementation of the Revised Compensation and Position Classification Plan in Government-Owned and/or -Controlled Corporations and Government Financial Institutions (GOCCs/GFIs),' dated February 15, 1999.
22.Rollo, p. 21.
23.Id. at 22.
24.Id. at 22-23.
25. See Annex 'B' of the Motion for Reconsideration (of the 29 July 2016 Decision 2016-179); id. at 77-79.
26.Id. at 23.
27.Id.
28.Id. at 70-74.
29.Id. at 25-32.
30. 785 Phil. 266 (2016).
31.Rollo, p. 28.
32.PCSO v. Chairperson Pulido-Tan, supra at 275. Emphasis omitted.
33.Rollo, pp. 29-30.
34.Id. at 3-18.
35.Id. at 11.
36.Id.
37.Id. at 102-103.
38. G.R. No. 243607, December 9, 2020.
39.Rollo, pp. 103-104.
40.Id. at 105.
41.Id. at 2.
42.Id. at 1.
43.Id. at 88-89.
44. See Motion for Extension of Time dated March 25, 2022 and filed March 29, 2022; id. at 90-92.
45. Per Resolution dated April 19, 2022; id. at 114-115.
46. Section 3, Rule 46, Rules of Court.
47. Section 5, Rule 64, Rules of Court.
48.Fontanilla v. The Commissioner Proper,COA, 787 Phil. 713, 723 (2016).
49.Zamboanga City Water District v. Commission on Audit, G.R. No. 218374, December 1, 2020.
50.Movertrade Corp. v. Commission on Audit, G.R. No. 214690, November 9, 2021; Zamboanga City Water District v. Commission on Audit, supra. See also Fortune Life Insurance Company, Inc. v. COAProper, 752 Phil. 97, 107 (2015).
51.Rollo, p. 11.
52.Zamboanga City Water District v. Commission on Audit, supra.
53. 366 Phil. 273, 292-293 (1999).
54. 444 Phil. 859, 869-870 (2003).
55.PCSO v. Chairperson Pulido-Tan, supra note 30 at 275-279.
56.Id. at 279-284.
57.Id. at 285.
58.Rollo, p. 76.
59. G.R. No. 244128, September 8, 2020.
60.Philippine Charity Sweepstakes Office v. Commission on Audit, supra note 38.
61.Rollo, p. 30.
62. See National Transmission Corp. v. Commission on Audit, G.R. No. 232199, December 1, 2020.